Primark flags rising revenue, but squeezed profits

Discount clothing retailer Primark expects to generate 4% sales growth in its current financial year, which runs to the end of this month.

However, profit margins at the Dublin-headquartered retailer - which trades here as Penneys - are likely to be lower than last year due to a weaker sterling pushing up import costs.

"The strengthening of the US dollar during this year and the recent weakening of sterling will increase the cost of goods for next year," the company said via a wider trading update from its diversified parent company Associated British Foods (ABF).

In that trading update, ABF said Primark has performed well in the UK thanks to an increase in its number of shops, with growth also strong in the US.

In mainland Europe, Primark was particularly boosted by a strong showing in Spain.

On Brexit, ABF - which also has interests in ingredients, agriculture and sugar - said all of its businesses have completed "all practical preparations" should the UK finally leave the EU.

"Contingency plans are in place should some of our businesses experience disruption at the time of exit," it said.

While its Irish operations weren't mentioned in the latest trading update, Primark said in July that it had been pleased with its trading performance here in its current financial year.

Earlier this year, Primark said it will move all of its buying, sourcing and merchandising staff and functions - currently split between Reading and Dublin - to its Dublin headquarters.